The New ISPs In the Sky

Today’s communications satellites are based on the same geo-synchronous approach that we’ve used for over 50 years. Enormously expensive satellites sit in fixed positions over the equator, restricting coverageand competing for bandwidth.

The alternative idea of Low Earth Orbit (or LEO) networks started in the 90s as well-funded efforts to provide mobile telephony to anyone, anywhere on the surface of the Earth. But those projects, including the initial versions of Iridium and Globalstar, failed to deliver on the hype because of technology constraints, coupled with poor business models.

Now 25 years later, projects are underway to make that vision commercially successful.

Why should this new spate of projects fare better than the originals? One reason is that satellites can now be made much smaller and lighter, so launch costs are significantly lower. More importantly, the size, manufacturability and component costs associated with the different terminals and handsets have plummeted since those early days, while functionality and ease of use have increased. There have also been significant advances in solid-state antennas for LEO satellite terminals, which need to track a satellite as it moves across the sky and transfer seamlessly to another satellite when the first satellite approaches the horizon. Meanwhile, satellite solar cell efficiency has more than doubled since the early days and power amplifier efficiency has also surged.

While these factors have helped strengthen the business case, uncertainties remain about demand, as well as ever-present regulatory constraints placed on frequency allocations for LEO satellites.

Notably, while the original investors in Iridium and Globalstar lost their money, both “satellite constellations” were built and have been operating for over 15 years. Furthermore, the companies have successfully raised money for second-generation constellations with Globalstar’s latest iteration launched in 2016 and Iridium’s “NEXT constellation” satellites scheduled to be fully operational in 2018.

Of the new entrants, analysts believe the most likely one to succeed is OneWeb, backed by Virgin Galactic, Qualcomm, Hughes Network Systems, and Airbus Defense and Space, as well as legacy satellite network operator Intelsat. Interestingly, Coca Cola is also involved.

OneWeb is planning a constellation of 650 active Ku-band satellites (plus 250 spares), each weighing only 68 lbs, which would make them amongst the smallest and lightest communications satellites designed for commercial service...